Honestly, I'd never heard of this before -- I have been filing IRS taxes for years, though as an Israeli citizen paying taxes here, the US/Israel dual taxation treaty meant I rarely had to actually pay the IRS anything.
Yet while the FBAR is nothing new...it was rarely filed by people and the IRS never went after you for not filing it.
So what's new?
1. Congress recently linked the requirement to file the FBAR to the U.S. Patriot Act, making the failure to file a criminal offense in addition to a civil offense. This is a serious change.
2. President Barack Obama is making good on one of his campaign pledges by promoting the more strict enforcement of tax laws. Starting with the 2008 FBAR, the IRS is enforcing policy of going after those who don't file.
Section 5321(a)(5) of the American Jobs Creation Act of 2004 imposes penalties of up to $10,000 for nonwillful failure to file the report or disclose foreign accounts. Whereas this sanction has not new for 2008, the IRS has announced that it intends to enforce penalties for FBAR noncompliance."Nonwillful failure" means that simply not knowing about this form is still reason enough to get in big trouble.
3. The mailing deadline for 2008 FBAR forms is JUNE 30, 2009 – and unlike regular IRS tax forms, no extensions are granted.
So remember, if you're an American citizen living in Israel, and have over $10K in an Israeli bank account, savings account, even a keren hishtalmut, you need to file this report by tomorrow...to avoid the "Patriot Act" knocking on your door (or it could be the next time you happen to visit the USA and the friendly Passport stamper doesn't smile at you....)
Unless you want to spend some quality time in Guantanamo and a hefty fine of 10 thousand dollars, I seriously suggest you discuss this with your CPA and file the report in the next 24 hours, if you haven't already.
Your CPA should be able to give you some basic direction...but plan to spend some time on this (I spent well over 8 hours.)
As Treppenwitz always says -- "don't thank me...I'm a giver"
Jpost: Your Taxes: US and Israeli tax amnesties
Ha'aretz: As U.S. turns up heat on tax laws, Americans in Israel start to sweat
Wherever I am, my blog turns towards Eretz Yisrael טובה הארץ מאד מאד